EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127418
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Leisure Link applied for a TCO in respect of certain bags on 12 August 2011.
Instrument
TCO No 1127418 was made on 07 November 2011. It declares that those certain bags are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1127418 is taken to have come into force on 12 August 2011.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, addresses the need to regulate the importation of goods into Australia, including the imposition of customs duties. Part XVA of the Act provides a framework for the Chief Executive Officer of Customs to grant tariff concession orders (TCOs) that reduce or eliminate customs duty on certain goods. The primary objective of this legislative scheme is to ensure that tariff concessions are granted only when no substitutable goods are produced in Australia, thereby supporting Australian production where possible while providing tariff relief where appropriate. The Tariff Concession Instrument No. 1127418, made under this Act, specifically grants a tariff concession for certain bags, reducing the duty from 5% to free, effective from the date the application was lodged. This measure was implemented following an application by Leisure Link and after no objections were received from the public, ensuring that the rights of existing parties are not adversely affected.
Scope and Application
The Tariff Concession Instrument No. 1127418 pertains to the Customs Act 1901, which establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can be applied for by any person and pertain to goods that are not specified as ineligible under section 269SJ of the Act. The instrument applies to those goods which, as of the date the application was lodged, are not being produced in Australia in the ordinary course of business and have no substitutable goods produced domestically. This concession allows for a lower rate of customs duty on the specified goods, as outlined in the Customs Tariff Act 1995. The instrument’s jurisdiction extends nationally, as it is an instrument of the Commonwealth under the Customs Act 1901, which is a Commonwealth Act. There were no submissions received in response to the public notice inviting objections to the making of the TCO, and the instrument does not disadvantage any person or impose liabilities on anyone except the Commonwealth in relation to actions taken before the registration date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1127418 under the Customs Act 1901, include sections 269C, 269F, 269P, and 269S. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C (1) specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria, subsection 269P(3) requires the CEO to make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved are primarily directed at the CEO. The CEO must review the application under section 269F and determine if it meets the core criteria outlined in section 269C. If satisfied, the CEO must make a TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to lodge submissions against the application. In this case, the CEO did not receive any submissions, indicating that the application process was unchallenged.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breaches of the Tariff Concession Instrument No. 1127418. However, the Act and its associated regulations do provide for various offences and penalties for breaches of customs-related provisions. For instance, section 216 of the Customs Act 1901 provides for penalties for offences such as the unlawful importation or exportation of goods, with maximum penalties that can include fines and imprisonment. Similarly, section 245 imposes penalties for false statements or representations made to a Customs officer. Although these provisions are not directly related to TCOs, they underscore the importance of compliance with customs regulations.
Under the Customs Act 1901, the CEO's decision to grant a TCO is subject to the core criteria being met, ensuring that the concession does not undermine domestic production. The process includes an opportunity for public consultation, enhancing transparency and fairness. The commencement of the TCO on the date of application means that rights and obligations are clearly defined from the outset. Importantly, the TCO does not affect pre-existing rights or impose new liabilities, protecting both the Commonwealth and private parties from unfair disadvantages.